The Price is Wrong: Part 2


In the last post, I gave up my neutrality and urged Canadian students to just say NO to today's fixed-rate student loans.

Most governments are over-charging to the point where these loans will almost certainly cost you thousands of dollars more than variable (floating-rate) loans.

Fixed-rate student loans normally cost a bit extra because you're getting the security of locking in today's student loan interest rate, so it won’t go up in future.

The Price is Wrong

Canada Cleans Up On Fixed-Rate Student Loans

 They only talk about the 'cheap' student loans.

When media and government discuss student loans, they usually talk as if there’s only one type. The one with the lowest price-tag – that’s what gets covered.

Not the more expensive ones, even though that’s what many Canadian students are stuck with.

Right now, what’s cheapest is the ‘variable’ (floating) student loan. And you don’t hear much about fixed-rate student loans.

Canada’s Student Loan Rates Compared (2013-2014)

As mentioned in my last blog, Canada’s federal (and most provincial) governments reap a hidden tax from the low and middle-income students who need to borrow student loans. 
These governments borrow money at a discount (at least 1% below the ‘prime’ rate). At present, that lets them borrow at 2% or less. Then they charge up to 400% more on student loans.

Canada’s Hidden Tax On Low-Income Students

I like to mix up our blog topics. But we need to return to this student loan interest theme because it’s costing Canadian students billions.
Let’s do the math.

Canada’s Tuition Fees Compared (2012-2013)

Attention, education bargain-hunters...
Let’s do a ‘Best to Worst’ follow up of my blog about Canada’s university fees out-running inflation.
As Statistics Canada outlined in that report, undergrad tuition rose this year an average 5%. The regional increases ranged from zero (Newfoundland has frozen rates) to 10.1% in Quebec.

Political Pressure Pays?

Remember when I reported Manitoba’s latest cut in student loan interest rates?
Guess I’m still thinking about it. Because I'm wondering how much of a role student lobbying played in that rate-cut.
Which of course, to students is best described in another word spelled m-o-n-e-y.  

Grace Means Grace in Manitoba

Umm, I don’t mean grace, like at the dinner table. Though it’s surely as sincere in Manitoba as it would be anywhere else.
No, I mean those student-loan ‘grace periods’ after you graduate.

Manitoba Goes Prime

Manitoba students, you just found a lot of money in your pockets! That's the payoff as your province continues to cut interest rates on its student loans.

Canada’s Tuition Fees Out-Run Inflation

In today’s “Daily,” Statistics Canada reported what students and their parents kinda know: education costs are still rising much faster than inflation. 
With recent low economic growth, inflation has not gone up much in recent years. Between July 2011 and July 2012, it rose by just 1.3 per cent.

How Much Do You Save With Interest-Free Student Loans?

Last week, I wrote about PEI dropping interest charges on its provincial student loans.
And in a 2009 blog, I reported on Newfoundland & Labrador doing the same
So far, these are the only provinces in Canada to take this step.  It’s a terrific gift to their students.